Public Enterprises warns against SAA liquidation
The Department of Public Enterprises has warned that the liquidation of South African Airways (SAA) will lead to financial hardship for employees and substantial undervaluation of assets.
In a statement on Thursday, the department said it believes that business rescue provides a better outcome than liquidation.
Spokesperson Sam Mkokeli says the creditor's meeting to vote on the future of SAA is set to take place on Tuesday.
"A vote in favour of the plan by 75% of the voting interests would be required to carry the vote. A vote against the plan would result in the protracted and costly liquidation of the airline.”
Mkokeli says failure to vote in favour of business rescue could result in a R32 000 severance settlement for all employees, no matter the number of years of service.
The department believes a restructuring process would provide opportunities to save jobs.
"As the shareholder on behalf of the government, we are of the view that business rescue is a viable alternative to liquidation – one which supports job preservation and the ability to bring the airline back from the brink to a position where some employees," says Mkokeli.
"It would require a level of commitment and cooperation from both SAA and the unions to overcome the devastating consequences of the Covid-19 pandemic where thousands of jobs are being lost on an unprecedented scale in South Africa."
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